Front Groups Work for Corporate America

Over the past two decades, the bosses in Corporate America have successfully convinced many in government – both at the national and state levels – that there is far too much governmental regulation and that all lawsuits involving corporate wrongdoing are frivolous. They have done an excellent job selling this message to the media. The smartest thing they did was to create a number of organizations to front for them. These groups, all with carefully selected names, and extremely well financed, have been working very hard to protect corporate wrongdoers, to destroy the civil jury systems, and to take away fundamental rights of the American people. The following are some of these groups.

The American Tort Reform Association (ATRA) was founded in 1986 and for many years was at the vanguard of the tort reform movement. Documents released in accord with the Tobacco Master Settlement revealed that ATRA was initially beholden to the tobacco industry, which provided as much as half of the organization’s total budget. In more recent times ATRA has relied on the largesse of a broader spectrum of big business interests, including corporations such as Dow Chemical, Exxon, General Electric, Aetna, Geico, State Farm, Pfizer, Johnson & Johnson and Nationwide. As much as 20 percent of its budget comes from the executives of its stealthy benefactor, the Civil Justice Reform Group (CJRG). With help from the giant public relations firm APCO Worldwide, ATRA was heavily involved in Astroturfing – creating fake grassroots campaigns – for tort reform. The regional Astroturf groups Citizens Against Lawsuit Abuse (CALA) and Sick of Lawsuits were a direct result of this strategy.

SEARLE CIVIL JUSTICE INSTITUTE

The Searle Civil Justice Institute found a new home at George Mason University’s Law & Economics Center in 2010. One of its primary roles is to coordinate empirical research efforts. Searle pays between $70,000 and $100,000 to produce and promote each research project and the issue areas of interest closely resemble ILR’s legislative priorities. Searle also works closely with the Civil Justice Caucus Academy, its sister program in the Law & Economics Center at GMU.

Founded in 1994, the Civil Justice Reform Group (CJRG) is the silent partner to its more boastful colleagues in arms. The secretive group has no employees, no office, and leaves the lightest paper trail possible. Run out of the law firm Wiley Rein, the CJRG is the source of much of the tort reform movement’s ideas and resources. Corporate general counsels from the likes of Exxon, State Farm, Johnson & Johnson, DuPont and Caterpillar are responsible for establishing the group’s agenda. The CJRG does not like to promote its own brand, preferring to keep its corporate members out of the spotlight. The group has few expenses other than the contributions it makes to other tort reform associations. For example, the CJRG provides ATRA with as much as 20 percent of its budget every year. According to ATRA’s Victor Schwartz, one of the architects of the tort reform movement, the CJRG “do things in a quiet and effective way without fanfare.”

AMERICAN LEGISLATIVE EXCHANGE COUNCIL

Few have ever heard of it, but the American Legislative Exchange Council (ALEC), is the ultimate smoke-filled back-room operation. On the surface, this group’s membership is mostly comprised of thousands of state legislators. Each pays a nominal membership fee in order to attend ALEC retreats and receive model legislation. ALEC’s corporate contributors, on the other hand, pay a king’s ransom to gain access to legislators and distribute their corporate-crafted legislation. So, while the membership appears to consist of public officials, it is bankrolled almost entirely by major corporations. In fact, public sector membership dues account for only around one percent of ALEC’s annual revenues.

The result has been a consistent pipeline of special interest legislation being funneled into state capitols. Thanks to ALEC, 826 bills were introduced in the states in 2009 and 115 were enacted into law. ALEC’s campaigns and model legislation have run the gamut of issues, but all have either protected or promoted a corporate revenue stream, often at the expense of consumers. For example, ALEC has worked on behalf of:

• Oil companies to undermine climate change proponents;

• Pharmaceutical manufacturers, arguing that states should be banned from importing prescription drugs;

• Big banks, recommending that seniors be forced to give up their homes via reverse mortgages in order to receive Medicaid;

• The asbestos industry, trying to shut the courthouse door to Americans suffering from mesothelioma and other asbestos-related diseases; and,

• Enron to deregulate the utility industries, which eventually caused the U.S. to lose what the Securities and Exchange Commission estimated as $5 trillion in market value.

ALEC has been up to its ears in controversy for the past two years thanks to the increased attention it has received for promoting a number of controversial state laws, including Arizona’s immigration law. The organization also faces potentially even more serious challenges, with the IRS receiving two formal complaints challenging the group’s nonprofit tax status.

INSTITUTE FOR LEGAL REFORM

The U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) is said to be the 800-pound gorilla of the tort reform movement. Funded by corporations whose average contribution tops $600,000 per year, ILR routinely spends an astounding $30 million per year lobbying the federal government. Ironically, considering its multimillion-dollar effort to shut the courtroom door to individuals, ILR’s parent organization is also one of the most aggressive litigators in Washington, D.C., appearing in hundreds of lawsuits a year. The Chamber has its own litigation arm, the National Chamber Litigation Center (NCLC), which both files its own lawsuits and enters into the lawsuits of others more than 130 times a year. In the words of Chamber president and CEO Tom Donohue, “litigation is one of our most powerful tools for making sure that federal agencies follow the law and are held accountable.”

U.S. Consumers and ordinary folks generally have been hurt badly because of the successes that the groups mentioned above and others have had during the past two decades. I suspect that less than 1 percent of the American people have ever even heard of any of these groups, with the Chamber of Commerce being an exception. But most folks don’t realize the national chamber is basically a tort reform group that protects huge corporations. It’s high time that all of these front groups be exposed for what they really are. Then the public will know who have been working against their economic and social interests. It’s important that this information gets out to the public.